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Thursday, October 29, 2020

Services help Apple Q2 revenue hit $58.3 billion, despite Covid-19 pandemic

Apple’s booming services business had a big quarter. The company earned $13.5 billion in services revenue, up 17 per cent from the $11.5 billion it reported in the same quarter last year.

By: Tech Desk | New Delhi | Updated: May 1, 2020 4:44:18 pm
Apple, Apple Q2 2020, Apples second quarter results, Tim Cook, Apple services business, iPhone, Apple Watch Despite the coronavirus pandemic, Apple was able to keep revenue steady.

Apple on Thursday said its revenue reached $58.3 billion in Q2 2020, the quarter that ended in March. The company said its quarterly revenue increased 1 per cent from a year earlier, which shows that the impact of the coronavirus pandemic on the world’s most valuable tech company has been minimal so far.

“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in services and a quarterly record for Wearables,” CEO Tim Cook said in a statement. “In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive.”

Apple’s booming services business had a big quarter. The segment includes Apple Arcade, Apple TV+, Apple Music, and iCloud. The company earned $13.5 billion in services revenue, up 17 per cent from the $11.5 billion it reported in the same quarter last year. Tim Cook has revealed that Apple News has 125 million monthly active users during the quarter, up from 100 million in January. Cook also revealed that both FaceTime and iMessage have set new all-time daily records during the Covid-19 pandemic.

But sales of iPhones fell 6.7 per cent to $29 billion, down from $30.9 billion the year before. “iPhone supply and demand were affected by the impact of COVID-19 at some point during the quarter,” Luca Maestri, Senior Vice President and Chief Financial Officer, Apple, said during a call with analysts. Mac revenue was $5.4 billion, down slightly from the $5.5 billion last year. Meanwhile, iPad revenue was $4.4 billion, down from $4.9 billion last year.

The Wearables, Home and Accessories segment brought in $6.28 billion, up 23 per cent year-over-year. “Our Wearables business is now the size of a Fortune 140 company, and we’re very excited by the many opportunities in front of us for this product category,” he said. What drove the wearable business was the Apple Watch. According to Maestri, 75 per cent of Apple Watch purchases made during the quarter represented the first time buyers.

Apple warned in February that it would be missing its second-quarter guidance due to the novel coronavirus outbreak in China impacting the global supply chain for iPhones and lower demand. The company said in January it had expected second-quarter revenue of between $63 billion and $67 billion. For its first quarter of 2020, Apple reported revenue of almost $92 billion, up 9 per cent year on year.

“This is something Apple has been contending with since January, and I think that how we have responded, what we have been inspired to do tells an important story about Apple’s great durability as a business and the enduring importance of our products and our customers’ lives,” Cook said. Apple did not provide financial guidance for the June 2020 quarter due to the lack of visibility and certainty.

Despite the coronavirus pandemic, Apple continues to launch new products. In March, Apple announced a new 11-inch and 12.9-inch iPad Pro, along with a new keyboard accessory. It also unveiled a new MacBook Air with a redesigned keyboard. Apple also announced a cheaper iPhone model called the iPhone SE. It costs $399, making the cheapest iPhone model in Apple’s current iPhone lineup.

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